Cryptocurrency Market Under Interest Rate Cut Expectations: Bitcoin Peaks and Retraces, Federal Reserve Meeting Decisions in Focus

As the U.S. economy enters a busy week, market participants are closely watching the Federal Reserve policy meeting on Wednesday and the upcoming economic data, which could have a significant impact on the short-term market trends.

Against this backdrop, the total market capitalization of the cryptocurrency market has once again surpassed 4 trillion dollars, but the momentum over the weekend has shown signs of fatigue, presenting a typical "Monday pullback" pattern. Currently, the total market capitalization has shrunk by 1% to 4.1 trillion dollars.

This week, economic events are frequent, and market attention is mainly focused on the following aspects:

Among them, the retail sales data report for August will be released on Tuesday. This data is also an important indicator of consumer confidence and overall economic health.

The Federal Open Market Committee meeting of the Federal Reserve on Wednesday will be the focus, with the market expecting the central bank to cut interest rates for the first time since December 2024.

According to data from the futures market of the Chicago Mercantile Exchange, the probability of a 25 basis point rate cut is as high as 95.9%, while the probability of a 50 basis point rate cut is 4.1%.

At the same time, the Federal Reserve has recently made it clear that it is more concerned with the weak labor market rather than inflation risks, and this policy shift could have a profound impact on encryption currencies.

Nick Ruck, head of LVRG Research, pointed out that in the context of macroeconomic uncertainty in the United States and record rises in gold, the resilience of encryption assets and their long-term characteristics as a hedge against inflation have been demonstrated. It is expected that fiscal stimulus and the Federal Reserve's loose policies will fuel the prosperity of cryptocurrencies until 2026.

However, Andrew Tyler, the global market intelligence head at JPMorgan, warned that the Federal Reserve meeting on September 17 could turn into a "sell-the-news" event, as the impact of interest rate cuts has already been digested by the market, and investors may take this opportunity to lock in profits.

Returning to the performance of the encryption market, BTC has recently attempted to break through 116,000 USD twice but faced resistance, currently retreating to around 115,000 USD. Although ETH briefly surpassed 4,700 USD, it is currently still oscillating around 4,500 USD. During the same period, mainstream altcoins have also generally experienced significant declines.

In summary, there are significant divergences in the market regarding the Federal Reserve's meeting decisions. Optimists bet on continued easing to write the next chapter of encryption prosperity, while pessimists are wary of a "sell-off" triggered by "seeing the light." The Federal Reserve's policy direction and economic data may directly influence the short-term fluctuations of the encryption market.

#Federal Reserve Meeting